New Brunswick-based Johnson & Johnson on Tuesday announced its intent to separate its Orthopaedics business, a strategic move aimed at enhancing the focus and driving value for both the parent company and the newly independent entity.
The Orthopaedics business, which generated approximately $9.2 billion in sales for fiscal year 2024, is set to operate as a standalone company under the name DePuy Synthes. J&J states that the separation would establish DePuy Synthes as the largest, most comprehensive orthopaedics-focused company in the world, with leading market share across major product categories.
According to J&J, the separation will further strengthen the parent company’s focus as an “innovation powerhouse,” accelerating the shift of its MedTech segment toward higher-growth and higher-margin markets. Following the transaction, J&J will retain leadership in six key growth areas: Oncology, Immunology, Neuroscience, Cardiovascular, Surgery, and Vision.
“This transaction enables Johnson & Johnson to further strengthen its focus and investment toward higher-growth areas where we can meaningfully extend and improve patient lives,” said Joaquin Duato, Chairman and Chief Executive Officer, Johnson & Johnson. “We are confident that our Orthopaedics business will be better positioned to improve top-line growth and operating margins as a standalone business.”
DePuy Synthes will continue to address a global market opportunity exceeding $50 billion and serve approximately seven million patients annually. The newly formed company is expected to benefit from a more focused business model, a dedicated leadership structure, and an investment-grade profile.
In a related announcement, J&J appointed Namal Nawana to serve as Worldwide President of DePuy Synthes, effective immediately. Nawana, who previously served as CEO of Smith & Nephew Plc and has a long history with J&J’s DePuy Synthes Spine business, will lead the business through the separation process and is expected to continue as its leader post-completion.
The company intends to explore multiple paths to effect the planned separation and is targeting completion within 18 to 24 months, subject to board and regulatory approvals.
